How to Find the Right Credit Card for You

A credit card can be a powerful tool to help improve your personal finances and increase your quality of life.

 

The key to getting the most benefit from a credit card is choosing the right one for you. Not all consumers have the same needs, spending habits, credit and income. Likewise, not all credit cards are the same. To find the right type of credit card for you, you need to prioritize the features and benefits that matter to you the most. Then, to find the right credit card of that type, you need to research credit card providers and compare their offers.

Once you know what you are looking for in a credit card and start comparing credit card offers, be sure to look at interest rates, penalties, fees, rewards and restrictions. Upon finding the credit card you want, fill out the application honestly. If you do not get approved right away, you still may be able to get the credit card with a higher rate or lower credit limit. If not, you can either apply for other cards with less stringent requirements or consider acquiring a secured credit card. Either way, the power to build and improve your credit and use it to advance toward your goals is entirely in your hands.

Identify Your Needs and Spending Habits

Take an honest look at how you spend your money. Figure out your budget and determine what your needs really are for a credit card. Do you need one to meet certain living expenses, like purchasing groceries and clothing? Conversely, do you want one to allow you to enhance your quality of life, such as going out to eat or the movies, taking a vacation or renovating a room in your home? Knowing how you plan to use your new credit card, how often and for how much will help you determine what kind of credit card you need.

Do Not Believe the Hype

Many credit cards are promoted with an introductory offer that expires after a limited time. Do not get roped in by these appealing offers. Rather, look beyond the promotional offers at the actual features, benefits and terms of the credit cards after those introductory offers expire. Some cards with enticing introductory offers often come with high interest rates once the initial offer has expired. These cards may cause more financial trouble than they are worth.

Look for Price Protection

Whatever type of credit card you decide to choose, seriously consider one that offers price protection on your purchases. Price protection is a guarantee that, if you buy an item that later goes on sale within a specified time frame, your credit card provider will give you a refund on the difference. You can find low-interest, rewards and business credit cards with and without price protection. Remember, as you compare and contrast credit cards, consider taking this valuable perk into account.

Forget the Warranties

Warranties may appear to be something favorable when you are looking at the various features and perks included in a credit card offer. However, these are typically not as beneficial to you as the credit card company might lead you to believe. Warranties are big money-makers for the companies offering them, and they rarely do much for the consumers who purchase them. Studies have shown many consumers never need to make use of the warranties for which they pay extra fees. With warranties, all you are really paying for is peace of mind. Given the hard data on warranties, it turns out you can get just as much peace of mind without one.

If You Travel, Get Trip Cancellation Insurance

If you travel frequently for business or pleasure, make sure the credit card you choose includes trip cancellation insurance. As a traveler, you know unexpected circumstances occur all the time. These unexpected issues include mechanical difficulties, inclement weather and overbooking, to name a few. Airlines, cruise ships and tour companies rarely offer refunds on cancelled trips, but your credit card might be able to help you recuperate the money you spent on a cancelled trip.

 

Consider Balance Transfer Offers

Many credit cards offer special deals on balance transfers for new cardholders. Even many rewards, business and low-interest cards also include balance transfer offers. With a balance transfer offer, you can consolidate other, presumably higher interest bearing debt onto one card. Often, you will get a limited time to make unlimited balance transfers for free or at a promotional interest rate. Note, however, some balance transfer offers include a fee for all transfers. Be sure, in such cases, to calculate how much that fee will cost you compared with how much it will save you to make the transfer.

Assess Your Qualifications

Now that you know what you would like in a credit card, it is time to consider what kind of credit card you can actually qualify for. This requires taking a look at your credit and income. If you determine you really do not qualify for any sort of credit card or if you have applied for credit cards only to be consistently turned down, you still have an option. Consider a secured credit card. With a secured card, you are actually the one providing yourself credit by depositing a certain sum in an account with the credit card company and spending against that balance. In other words, if you deposit $500 into your secured card account, your credit limit on your secured card is $500.

While secured cards may not seem much different from writing checks against a checking account balance, there are several unique benefits secured cards offer. Firstly, sometimes you need a valid credit card to make a purchase or secure a reservation. Secured cards are recognized as valid credit cards anywhere credit cards are accepted or required. Secondly, the providers of secured cards report their cardholders’ activity just like they do for regular credit card holders. Therefore, using a secured credit card responsibly is a powerful, fast and effective way to quickly build and improve your credit.

 

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